Sequoia Capital India has closed a $195 million second seed fund as part of its Surge programme, which backs seed and early-stage startups through funding and mentorship. Launched in 2019, Surge invests in pre-Series A startups in India and Southeast Asia and had kicked off with a corpus of $200 million.

The new capital will add to the already frenetic dealmaking being seen in India at seed and Series A financing rounds. ET reported that young startups have been flooded with multiple term sheets and offers of investment even before they have launched their products. Average deal sizes have gone up substantially and rounds are closing in record time akin to the euphoria of the 2014-15 funding boom. In two years of investing in young companies which are typically in the pre-revenue stage, as many as 69 startups from four Surge cohorts have graduated from the 16-week programme and gone on to raise $172 million from Sequoia. Almost 60% of Sequoia’s Surge startups have mopped up $390 million in follow-on capital, the venture fund said.

ET reported that last year, as many as 828 seed rounds closed averaging at $941,000, while there were 242 Series A fundraises with an average size of $4.7 million, according to Tracxn, a research platform that tracks data for privately held companies. This upward momentum has carried into this year as well. In the first three months of this year, seed-stage rounds averaged $1.1 million while Series A had notched up compared to last year averaging at $5.1 million across 32 financing rounds, as per data tracked till March 2.